More Chile quake insurer estimates

Chris Wheal

Mar 10th 2010

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More insurers have estimated their losses from the Chile earthquake and the recent windstorm in France and Spain called Xynthia. Swiss Re estimates its loss from the Chile quake to be $500m from a total insurance loss of $4bn to $7bn. Its losses from Xynthia will be approximately $100m,it said.

Reinsurer Transatlantic Holdings, which is buying millions of its own shares back from an AIG subsidiary, expects to incur between $60m and $90m, net of tax, from the Chile earthquake and European windstorm Xynthia. And PartnerRe has reported too.

Bermuda reinsurer PartnerRe estimates claims from the Chile earthquake to be $220-$320m out of a total industry loss of $6-$10bn and for European windstorm Xynthia to cost it $40-$70m out of a total industry cost of $2-$4bn.

Many more insured

"In Chile, it is common practice for owners of mortgaged residential property, commercial and industrial property to buy earthquake insurance from local and global private insurance companies, Swiss Re said.

"Accordingly, this latest earthquake will lead to significant insurance claims for property damage and business interruption which are designed to facilitate a swift economic recovery.

It said: "The uncertainties in estimating losses from such an event are significant, and this preliminary estimate may need to be adjusted as new information becomes available."

Xynthia

Swiss Re said: "Coverage against wind and flood damage is standard practice in the countries affected by Xynthia. These covers are provided by state-run cover schemes (CatNat in France, Concorcio in Spain) and by the private insurance sector.

Based on preliminary estimates, Swiss Re expects its claims for winter storm Xynthia, net of the benefits of retrocession, to be approximately $100m before tax.

"PartnerRe's loss estimate is net of reinstatement premium and retrocession. It is based on a top down analysis as well as on model output, the assessment of individual treaties and client data, and is consistent with the Company's market position in the region," the company said.

"This estimate is preliminary, as there is limited actual loss data. As additional information is received particularly relating to potential structural damage in the capital of Santiago, we will update this estimate."

Wide estimates

Estimates of the total insured vary widely but there is universal agreement hat many more in Chile were insured and the buildings there were better designed to cope with quakes - even quakes as big as this one.

With insurers all seemingly well -able to cope with predicted losses, the insurance and reinsurance looks to have been well-designed too.